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Dec 31, 2020
Yum China Q4 2020 Earnings Report
Yum China's Q4 2020 results showed revenue growth and improved profitability despite ongoing COVID-19 challenges.
Key Takeaways
Yum China reported an 11% increase in total revenues and a 90% increase in operating profit for the fourth quarter of 2020. The company opened 505 new stores during the quarter and managed to improve restaurant margins despite same-store sales decline. While the recovery was uneven due to regional COVID-19 outbreaks, the company's digital capabilities and value campaigns helped drive traffic and improve overall performance.
Total revenues increased by 11% year-over-year to $2.26 billion.
Operating Profit surged by 90% year-over-year to $180 million.
Same-store sales declined by 4% year-over-year.
Opened 505 new stores in the fourth quarter, contributing to a total of 1,165 new stores opened in 2020.
Revenue by Segment
Forward Guidance
Yum China anticipates significant headwinds in the first quarter of 2021 due to regional COVID-19 outbreaks and tightened public health measures. Despite these challenges, the company remains committed to growth and intends to open approximately 1,000 new stores in the year ahead and make capital expenditures of approximately $600 million.
Positive Outlook
- Continue to manage the impact of the pandemic.
- Swiftly adjust operations according to market conditions.
- Drive traffic with compelling offers for both dine-in and off-premise occasions.
- Leverage industry-leading digital capabilities.
- Remain committed to growth and intend to open approximately 1,000 new stores in the year ahead.
Challenges Ahead
- Significant headwinds in the first quarter.
- Traffic is significantly lower in transportation and tourist locations.
- Chinese New Year holiday season will be subdued.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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